Mortgage News April 1, 2023
Adopting eco-friendly practices has become extremely popular, whether it’s for minimizing one’s carbon emissions, enhancing the effectiveness of one’s household, or simply being a responsible member of the global community.
Incorporating environmentally friendly and energy-efficient features into a home provides sellers with a competitive advantage in the real estate market, as an increasing number of potential buyers recognize the monetary and ecological advantages of having such upgrades in a property.
Additionally, certain mortgage providers provide refunds, credits, and reduced rates, while the U.S. Department of Energy (DOE) administers energy-efficient financing initiatives, such as energy-efficient mortgages (EEM), that can enable purchasers to qualify for a more expensive eco-friendly home than they would have otherwise been able to afford.
Moreover, there are initiatives that assist homeowners in enhancing the energy efficiency of their residences, such as the Weatherization Assistance Program, which provides funding to qualified applicants for specific upgrades. This program concentrates on individuals with incomes that do not exceed 200% of the federal poverty level and those who receive Social Security benefits.
Other financing options at the lender level are also available, such as Fannie Mae’s HomeStyle Energy Mortgage, which is accessible to individuals buying a new residence or refinancing their current one. Similarly, Freddie Mac’s GreenCHOICE Mortgage endeavors to lower utility expenses by incorporating energy-efficient enhancements for all borrowers. There are also comparable funding alternatives offered by other lending institutions.
Recent research by Assurance reveals that Oregon is the leading state for eco-friendly residences, with a 109% higher number of green home listings than the national average. More than half of the homes in Oregon rely on electric heating rather than gas, and 48% of the state’s total energy consumption comes from renewable sources.
Atlanta, Georgia has the highest number of green home listings on Redfin, with 543 eco-friendly residences per 100,000 units. Redfin categorizes “green homes” as those with LEED or Energy Star certification, solar panels, energy-efficient appliances, or other sustainable characteristics.
Nevada boasts the highest number of solar-powered homes (136,340 residences per 500,000 inhabitants), while California provides the most state-sponsored incentive programs for renewable and efficient energy sources (161). These initiatives offer incentives such as tax credits, grants, and rebates to encourage their adoption.
However, energy-saving and weatherization programs are not only provided by prominent lending institutions and the federal government; various states, counties, and cities also offer such programs to varying degrees.
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